Leiden Law Blog

Money money money… in a rich man’s world

In 2013 I wrote a blog on this site about the excessive salaries of managers and television celebrities (in the public sector). Recently the Dutch bank ING announced that Ralph Hamers, Chairman of its Executive Board, would receive a 50% increase of his annual salary – to thank him for what he has achieved. His salary was 2 million Euros and now it would become 3 million Euros. That is, if the shareholders would agree with this proposal in April. To modest earners like myself, these kinds of amounts of money are pretty unreal. What could it add to one’s life quality?

Disbelief and disgust

In the aftermath of the financial crisis of 2008 there was some hope that things were going to change, and this hope became even stronger when researchers like the Dutch anthropologist and journalist Joris Luyendijk painfully exposed the ways of the bankers. ING’s proposal to raise the chairman’s salary so dramatically – and even considering this quite normal – was a clear indication, however, that in this respect the bankers’ outlook had not changed at all. It should not have surprised them that it did not take long before widespread feelings of disbelief and disgust were expressed through the media.

The private and public sector

Because the banks are considered part of the private sector, the existing laws dealing with salaries in the public sector had not been able to successfully limit the salary increases in the banks. On March 11 Jesse Klaver, leader of the Dutch green party GroenLinks, announced in the television programme Buitenhof that he had found a way to prevent these kinds of salary increases: by creating an emergency law, which would make the so-called system banks – big banks like ING that cannot be allowed to fall and therefore have a public function – part of the public sector. On March 13, ING gave in to public pressure and the proposal to raise Hamers’ salary was withdrawn. Klaver was not convinced that it would not happen again and continues with the creation of this new law. Indeed, there is no sign yet of any real change.

Look who’s talking

It is really ironic that Jan Peter Balkenende, a former Dutch Prime Minister who since 2017 is a member of ING’s Supervisory Board, has been involved directly with the proposal to raise Hamers’ salary. He had once fought for the acceptance of the Balkenende norm, a rule which limited the annual salary of ‘big earners’ in the public sector to 130 percent of the salary of a minister (which in 2017 was 228,559 Euros). OK, perhaps he voted against it, but still… There was also some irony in the fact that the salary increase was discussed and criticised extensively in talk shows on television whose presenters themselves earn excessive salaries… And what about the fact that the news of the ING proposal was broadcast on March 8, International Women’s Day? On this day it was stressed once again that women all over the world still earn less than men for the same kind of work. But then, of course, one could argue that Hamers’ job is simply incomparable to any other job.

From quantity back to quality

To put the discussion about excessive salary increases in perspective, in my blog of 2013 I reflected on the meaning of value, and on the difference between quality and quantity. What I said then about the public sector also makes sense for the private sector:

Originally ‘value’ was a qualitative, immaterial concept, but we have become used to quantifying quality. Often this works out fine. In schools and universities we rate quality through quantitative figures. And we give presents to others to express our gratitude. But it becomes problematic when we focus too exclusively on quantity. Attaching a positive value to a constant increase in the amount of money one earns, shows there’s something fundamentally wrong. If we really want the ‘big earners’ in the public sector to be satisfied with a lower salary, we first have to find other ways to express our values: we have to go back to the source.

The fact that even these ‘big earners’ still aim for a salary increase reveals something important: the expected salary increase is really an exterior substitute for our innate longing for inner development. Or perhaps more accurately: a substitute for our lack of inner development. But a substitute, of course, can never fully replace the original. If we (collectively) manage to rediscover that the real value of life lies in inner development – in making our lives gradually richer in an immaterial way, increasing our enjoyment of ’little things’, opening up to others, pursuing a personal interest, going for a good walk, etc. – rather than focus on the importance of earning an extravagant salary, then the need to exceed the salary of other people might become less.

Quality in the real world

Rereading these words and knowing that the proposal for Hamers’ salary increase has been withdrawn, I still wonder whether we have made any progress since 2013. This ING case has made it clear once more that the greed-is-good mentality is far from gone. The only lesson that bankers will probably learn from this is to avoid media attention in future. But despite this, I’m sure that in the longer run things are going to improve. Joris Luyendijk’s observation (in his book ‘Among the Bankers’) that the bankers’ world is completely out of touch with reality, is important here. Eventually it will all come down to who is (or isn’t) in touch with the real world, with the quality of life in its diverse manifestations – indeed, who can enjoy the ‘little things’ which cost nothing at all. The value of these ‘priceless’ experiences can never be beaten by a million Euros – which, after all, in comparison is just a huge stack of coloured paper, or a one with six zeros shining on a screen.

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Note: Thanks of course to ABBA for giving me inspiration for the title.

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